Foreclosure refers to a legal process in which a mortgage lender or third-party lien holder gains ownership of and sells a piece of property to pay off the mortgage debt. While many individuals understand that filing for bankruptcy can wipe out their credit card debt and other unsecured debts, few individuals understand how bankruptcy can be used to stop the foreclosure process. Continue reading to learn how filing for bankruptcy with an experienced attorney can help keep you in your home.
When you file for either Chapter 7 or Chapter 13 bankruptcy, an automatic stay is placed on all of your accounts. This automatic stay goes into effect immediately and notifies your creditors that they must cease all collection activities such as contacting you via mail, phone, or showing up to your home in person. By prohibiting creditors, collection agencies, and government entities from taking further action, filing for bankruptcy can help prevent foreclosure and eviction, keep your utilities from being disconnected, and help you avoid multiple wage garnishments.
It is important to realize that there are a few ways that your creditors can get around an automatic stay. For example, a creditor can petition the bankruptcy court to remove or “lift” the stay if you filed for bankruptcy on the same day your home is scheduled for sale in foreclosure. The court may also accept a creditor’s request to lift the automatic stay if you have no equity in the home and you have no way of keeping the property in the future.
Make sure bankruptcy is the right decision for you and your family by seeking the advice of an experienced attorney. For more information on how filing bankruptcy can stop foreclosure, contact the bankruptcy lawyers with Dixon & Johnston, P.C. at (618) 233-1103 today. We also practice social security law. Call today to schedule your free and confidential case evaluation.